Civil Forfeiture Proceedings in The Philippines PDF

CIVIL FORFEITURE PROCEEDINGS IN THE
PHILIPPINES: THE LONG ROAD AHEAD*
Renan E. Ramos**
I. Introduction
In the heat of the verbal tussles between the contending lawyers in

the impeachment trial of Chief Justice Renato Corona, it became clear that
the prosecution team were invoking the provisions of the first civil
forfeiture law in the Philippines Republic Act No. 1379 (hereinafter
R.A. No. 1379), to prove that the highest magistrate of the land acquired
ill-gotten wealth.1 However, even as impeachable officials like him can be
removed from office upon conviction of culpable violation of the
Constitution, treason, bribery, graft and corruption, other high crimes, or
betrayal of public trust,2 any judgment by the impeachment court extends
no further than removal from office and disqualification to hold another
public office, although the one convicted shall be liable to prosecution,
trial, and punishment according to law.3
The limited jurisdiction vested in the Senate by the Constitution

means that it cannot grant the relief of forfeiture. Nevertheless, the law
provides that all public officials under investigation for ill-gotten wealth
would be subject to the appropriate civil forfeiture proceedings and other
remedial measures before the proper court. The proceeds of a crime may
* Cite as Renan Ramos, Civil Forfeiture in the Philippines: The Long Road Ahead, 86
PHIL. L.J. 484, (page cited) (2012).
** Mr. Ramos graduated from UP Diliman with an AB Economics degree in 1981
and an LLB degree in 1985. He was editor-in-chief of the Philippine Law Register in
his first year at the UP College of Law. After passing the 1985 bar, he clerked with
Judge Andres E. Matias, a former senior associate of Claro M. Recto. He now works as
an Assistant Solicitor General at the Office of the Solicitor General, where he was
chosen as most outstanding lawyer in 2000. He is also a lecturer for the MCLE
Program of the UP Institute for the Administration of Justice and has written three law
books, including the latest, the three-volume Administrative Code of 1987 Annotated.
1 Rep. Act No. 1379 (1955). This is entitled An Act Declaring Forfeiture in Favor
of the State Any Property Found to Have been Unlawfully Acquired by any Public
Officer or Employee and Providing for the Proceedings Therefor.
2 CONST. art XII, 2.
3 CONST. art XII, 3(7).
484
[2012 CIVIL FORFEITURE PROCEEDINGS 485
also be forfeited in criminal cases, as an accessory penalty, once the

judgment of the conviction of the accused becomes final.4
While intense public scrutiny is focused on government officials,

private individuals who run afoul of the law may also find their ill-gotten
wealth forfeited pursuant to Republic Act No. 9160, the Anti-Money
Laundering Act of 2001, as amended by Republic Act No. 9194
(hereinafter R.A. No. 9160, as amended).5 R.A. No. 9160, as amended,
took over from where R.A. No. 1379 left off, with the government itself
initiating the civil forfeiture proceedings whether the respondent is a public
official or employee, or a private individual.
When all is said and done, it all boils down to the worn-out adage
that crime does not pay.
This paper intends to discuss the advantages of instituting civil

forfeiture proceedings to forfeit ill-gotten property, as opposed to
exclusively relying on criminal forfeiture. It aims to provide a series of
recommendations to improve our pertinent laws on the matter, specifically,
the broadening of the list of unlawful activities covered by the AMLA and
plug its loopholes to minimize, if not completely eradicate and eliminate
the menace and scourge of criminality and corruption.
To do this, it is necessary to go through the gamut of the

forfeiture laws of the Philippines, which includes R. A. No. 1379;
Executive Order No. 1 (hereinafter E.O. No. 1), Executive Order No. 2
(hereinafter E.O. No. 2), Executive Order No. 14 (hereinafter E.O. No.
14), and Executive Order No. 14-A (hereinafter E.O. No. 14-A);
Section 15, Chapter IV, Title I, Book III, Executive Order No. 292; and
R.A. No. 9160, as amended. Of these laws, only R.A. No. 9160, as
amended, deals with the forfeiture of monetary instruments, property, or
proceeds relating to, representing, or involving unlawful activities whether
committed by a government functionary or a private individual, while the
other laws enumerated above principally cover public officials and
employees.
II. Historical Origins
Forfeiture is defined to be the incurring of a liability to pay a

definite sum of money as the consequence of violating the provisions of
4 REV. PEN. CODE, art. 25.

5 Rep. Act No. 9160 (2001), as amended by Rep. Act No. 9194 (2003).
486 PHILIPPINE LAW JOURNAL [VOL 86
some statute or refusal to comply with some requirement of law. It may be

said to be a penalty imposed for misconduct or breach of duty.6 It is a
divestiture of property without compensation, in consequence of a default
or offense,7 and is a method deemed necessary by the legislature to restrain
the commission of the offense and to aid in its prevention.8 It is an action
against the res, the property itself,9 and the effect of a forfeiture is to
transfer the title to the specific thing from the owner to the sovereign
power.10As a penalty, it denotes punishment by way of a pecuniary (or
material) exaction from the offender, collected through an action in
personam, and imposed and enforced by the State for a crime or offense
against its laws.11
The penalty originated from the English principle of deodand, i.e., a

thing given to God under religious law because it caused a death. The
principle was applied principally in cases where animals caused human
death, which were then forfeited to the English King or Queen (who
represented God). The royal staff then sold the animal to distribute the
proceeds to the poor. Although the principle never found its way into the
American legal system, the concept of in rem proceedings against a thing
for violating the law was adopted in US customs and admiralty laws. These
procedures were written into the Supplemental Rules for Certain Admiralty
and Maritime Claims applicable to civil forfeiture cases.12
Civil forfeiture, known in the US as non-conviction based

forfeiture,13 was introduced in the Philippines by R.A. No. 1379.
Nonetheless, it was still characterized as criminal in nature, which means
that the defendants are protected from self-incrimination.14 However, in
Republic vs. Sandiganbayan,15 forfeiture proceedings were declared actions in
6 BLACKS LAW DICTIONARY 778. (4th ed.)

7 State v. Cook 203 La 95, 13 So 2d 478 (1943); Arthur v. Trindel, 168 Neb 429,
96 NW2d 208 (1959). (Moreover, a clause of forfeiture provides for a punishment to be
inflicted for a violation of some duty enjoined upon the party by law, while in an
engagement between individuals, it is a matter of contract.)
8 Cooper v. One White Model 1950 Motor Tractor, 225 La 190, 72 So 2d 474
(1953); Commonwealth v. Certain Motor Vehicle, 261 Mass 504, 159 NE, 61 ALR 548
(1928).
9 Utah Liquor Control Commission v. Wooras, 97 Utah 351, 93 P2d 455 (1939).
10 Commonwealth v. Avery, 77 Ky (14 Bush) 625 (1879); State v. Sponaugle, 45 W
Va 415, 32 SE 283 (1898).

11 Am. Jur., Vol. 36., at 612.
12 Jean Weld, Forfeiture Laws and Procedures in the United States of America, available at
http://www.unafei.or.jp/english/pdf/RS_No83/No83_06VE_Weld1.pdf (Date last

visited: Feb. 3, 2012).
13 Id.
14 Cabal v. Kapunan, G.R. No. 19052, 6 SCRA 1059 (1962), citing 23 Am Jur 599.
15 G.R. No. 90529, 200 SCRA 667, Aug. 16, 1991.
rem and therefore civil in nature. This seemingly irreconcilable

contradiction was resolved in Republic vs. Sandiganbayan,16 where it was held
conclusively that forfeiture proceedings under R.A. 1379 are civil in nature.
III. Laws Applicable
1. R.A. No. 1379
Enacted on June 18, 1955,17 R.A. No. 1379 authorized the filing of
a civil case, i.e., a petition for a writ commanding a public officer or
employee to show cause why the property which appears to be manifestly
out of proportion to the salary and other income of the public officer or
employee, should not be declared property of the State. Under this law, a
criminal conviction of the public officer or employee is not necessary
before the properties are declared forfeited in favor of the State. In pursuit
of this endeavor, the Solicitor General was tasked to institute forfeiture
proceedings in court. In Republic v. Sandiganbayan, however, it was held that
the authority to investigate and initiate the proper action for the recovery
of ill-gotten and/or unexplained wealth amassed after February 25, 1986 is
vested with the Ombudsman.18 Consequently, the Solicitor General could
only initiate civil forfeiture proceedings recovery of ill-gotten or
unexplained wealth amassed up to February 15, 1986.19
How presumption of ill-gotten wealth arises
A public officers or employees ostentatious display of wealth is

truly reprehensible, given the admonition in Section 1 of Article XI of the
Constitution that they should lead modest lives. But to be able to prosecute
the officer or employee for such wealth, a taxpayer must show that the
public officer or employee amassed or accumulated during his incumbency
an amount of property which is manifestly out of proportion to his salary
as such public officer or employee and to his other lawful income and the
income from legitimately-acquired property.
The accumulation of property by a public officer or employee
which is manifestly out of proportion to his legitimate income raises a
prima facie presumption that he unlawfully acquired the property. In turn,
the prima facie presumption will constitute a reasonable ground that the
public officer or employee is probably guilty of violating R.A. No. 1379,
and justify the initiation of forfeiture proceedings against the public officer
16 G.R. No. 152154, 416 SCRA 133, Nov. 18, 2003.

17 NOELVILLAROMAN, LAWS AND JURISPRUDENCE IN GRAFT AND CORRUPTION,
A COMPENDIUM 181 (2005).
18 Republic, 200 SCRA at 682.
19 Republic, 200 SCRA at 683.
or employee shown to have amassed unexplained wealth during his

incumbency.
One barometer that a public officer or employee may have amassed

or accumulated during his incumbency ill-gotten wealth is his non-
disclosure and concealment of vital facts in the Statement of Assets and
Liabilities and Net Worth (hereinafter SALN) required to be submitted
under Section 7 of R.A. No. 3019 (hereinafter R.A. No. 3019).
Appropriately, in Ombudsman v. Valeroso,20 the Supreme Court held that
unexplained wealth usually results from non-disclosure or concealment
of vital facts in the SALN:
Section 8 above, speaks of unlawful acquisition of

wealth, the evil sought to be suppressed and avoided,
and Section 7, which mandates full disclosure of
wealth in the SALN, is a means of preventing said evil
and is aimed particularly at curtailing and minimizing
the opportunities for official corruption and
maintaining a standard of honesty in the public
service. Unexplained matter normally results
from non-disclosure or concealment of vital
facts. SALN, which all public officials and employees
are mandated to file, are the means to achieve the
policy of accountability of all public officers and
employees in the government. By the SALN, the
public are able to monitor movement in the fortune of
a public official; it is a valid check and balance
mechanism to verify undisclosed properties and
wealth. (Emphasis supplied)
Note, however, that legitimately-acquired property21 is beyond the

purview of the law on forfeiture. Moreover, resignation, dismissal, or
separation from the service is not a bar to the filing of a petition for civil
20 520 SCRA 140, 149-50 (2007)(which was later cited with approval in Carabeo
v. CA, 607 SCRA 394, 412 (2009)).

21 Legitimately-acquired properties include any real or personal property, money
or securities which the respondent has at any time acquired by inheritance and the
income thereof, or by gift inter vivos before his becoming a public officer or employee,
or any property (or income thereof) already pertaining to him when he qualified for
public office or employment, or the fruits and income of the exclusive property of the
respondents spouse. It does not include: (1) Property unlawfully acquired by the
respondent, but its ownership is concealed by its being recorded in the name of, or held
by, the respondents spouse, ascendants, descendants, relatives, or any other person; (2)
Property unlawfully acquired by the respondent, but transferred by him to another person
or persons on or after the effectivity of Rep. Act No. 1379; and (3) Property donated to
the respondent during his incumbency, unless he can prove to the satisfaction of the
court that the donation is lawful. (Rep. Act No. 1379, 1(b) (1955)).
forfeiture.22 Instead of a trial, the law merely requires a hearing, during

which time the respondent is given ample opportunity to explain to the
satisfaction of the court how he acquired the property in question.23 This
means that the proceedings under R.A. No. 1379 are summary in nature24
and the onus is on the respondent to show that the property in question
was lawfully acquired. He must rebut the presumption that the property is
ill-gotten. If the respondent is unable to show to the satisfaction of the
court that he has lawfully acquired the property in question, then the court
shall declare such property forfeited in favor of the State, and by virtue of
such judgment, the property aforesaid shall become property of the State.25
Although the evidence asked of a person may tend to incriminate

or subject him to prosecution, it is not an excuse for him to disobey the
lawful orders of the forfeiture court. But such person may claim his
privilege against self-incrimination as provided in the Constitution.26 Be
that as it may, any statement he makes in connection with the proceedings
may be used against him for prosecution of the crime of perjury or false
testimony or administrative proceedings.27 Where a persons testimony is
necessary to prove violation of R.A. No. 1379, he may be granted
immunity if he testifies to the unlawful manner in which the respondent
acquired the property in question.28 It is therefore clear from the
provisions of the law that the State is serious in its commitment (at least,
on paper) to effect forfeiture of ill-gotten wealth.
Father time is not a valid defense and the defendant cannot invoke
the laws concerning acquisitive prescription and limitation of actions in
respect of any property unlawfully acquired by him.29 This is supported by
Article 1108(4) of the Civil Code, which provides that both acquisitive and
extinctive prescription do not lie against the State and its subdivisions.
Prior to the 1987 Constitution, there was uncertainty as to the applicability
of the statute of limitations. R.A. No. 1379 provided that the right to file a
petition for civil forfeiture prescribes after four years from the date of the
resignation, dismissal, or separation or expiration of the term of office of
the officer or employee concerned.30 On the other hand, E.O. No. 14
provides that the time limitations under R.A. No. 1379 are not applicable
22 Rep. Act No. 1379, 2 (1955).

23 5.
24VILLAROMAN, supra note 17, at 194 (which Villaroman categorized as summary
judgment).
25 6.
26 CONST. art III, 15.
27 8.
28 9.
29 11.
30 2.
to the forfeiture of alleged ill-gotten wealth of former President Marcos,

his relatives and close associates.31 This contradiction was finally resolved
by the enactment of the 1987 Constitution, which expressly states that the
right of the State to recover properties unlawfully acquired by public
officials or employees, from them or from their nominees or transferees,
shall not be barred by prescription, laches, or estoppel.32
The travails of a respondent facing civil forfeiture proceedings

under R.A. No. 1379 may not only cost him an arm and a leg. Under
Republic Act No. 3019, a public official shall be dismissed from the service
if he has been found to have acquired during his incumbency, whether in
his name or in the name of other persons, an amount of property or
money or both manifestly out of proportion to his salary and to his other
lawful income.33 Properties in the name of the spouse and unmarried
children of such public official may be taken into consideration, when their
acquisition through legitimate means cannot be satisfactorily shown. Bank
deposits shall also be taken into account, notwithstanding any provision of
law to the contrary. The circumstances hereinabove mentioned shall
constitute a valid ground for administrative suspension of the public
official concerned for an indefinite period until the investigation of the
unexplained wealth is completed.34
In this instance, a dilemma arises: can the forfeiture court impose

the penalty of dismissal when it finds that the respondent public official
has been found to have acquired during his incumbency, whether in his
name or in the name of other persons, an amount of property and money
manifestly out of proportion to his salary and to his other lawful income?
From the nature of the proceedings of a civil forfeiture court, it would
seem that meting out the penalty of dismissal is beyond its jurisdiction. The
judgment contemplated in Section 6 of the forfeiture law covers only
forfeiture of the unexplained wealth in favor of the State and the
jurisdiction of the court hearing the civil forfeiture case does not extend to
imposition of administrative penalties. An administrative case must be filed
against the respondent after the judgment of forfeiture becomes final. This
can be reasonably inferred from Section 9(b) of R.A. No. 3019, which
punishes the violation of the kindred provision under Section 7 with
removal or dismissal after proper administrative proceedings are
conducted against the public official concerned.
31 Exec. Order No. 14, 6 (1986).

32 CONST. art. XVI, 15.
33 8 (1960). This is the Anti-Graft and Corrupt Practices Act.
34 8.
What about the indefinite suspension of respondent until the

investigation of the unexplained wealth is completed? The Ombudsman is
only authorized to preventively suspend a public officer or employee for
not more than six (6) months.35 Agencies applying civil service rules,
however, are authorized to impose preventive suspension upon a public
officer or employee, when warranted, for not more than ninety (90) days.36
Consequently, the indefinite suspension mentioned in R.A. No. 1379 is
not really that indefinite.
2. E.O. No. 1, E.O. No. 2, E.O. No. 14, and E.O. No. 14-
A
After the ouster of the late President Ferdinand Marcos, President

Corazon Aquino, in her capacity as Chief Executive cum legislator issued:
1. E.O. No. 1 dated Feb. 28, 1986, which created the PCGG
and provided for its functions.
2. E.O. No. 2 dated March 12, 1986, which froze all assets
and properties in the Philippines of Marcos and his
associates; prohibited the transfer, conveyance,
encumbrance, depletion, and concealment of said
properties; required persons holding such properties
whether in the Philippines or abroad to make full
disclosure of the same to the PCGG; and prohibited
Marcos, his wife, relatives and associates from
transferring, conveying, encumbering, concealing, or
dissipating said assets or properties here or abroad.
3. E.O. No. 14 dated May 7, 1986, which empowered the

PCGG, with the assistance of the Office of the Solicitor
General (hereafter OSG), to file and prosecute cases
investigated by it under E.O. No. 2, whether civil or
criminal, before the Sandiganbayan.
4. E.O. No. 14-A dated August 18, 1986 which provided

that the civil suits to recover unlawfully acquired property
35Rep. Act No. 6770, 24 (1989).

36Exec. Order No. 292, book V, tit. I, subtit. A, 52 (1987). This is the
Administrative Code of 1987; See also Beja, Sr. v. Court of Appeals, G.R. No. 97149,
207 SCRA 689, 695, Mar. 31, 1992, (which was favourably cited in RENAN E. RAMOS,
THE ADMINISTRATIVE CODE OF 1987 ANNOTATED 1073 (2010)).
under R.A. No. 1379, or for restitution, reparation of

damages, or indemnification for consequential and other
damages or any other civil actions under the Civil Code or
other existing laws filed with the Sandiganbayan against
Marcos, his relatives, and associates may proceed
independently of any criminal proceedings and may be
proved by preponderance of evidence. It also gave the
PCGG authority to grant immunity from criminal
prosecution to witnesses who provide information in any
investigation conducted by the PCGG to establish the
unlawful manner in which any respondent, defendant, or
accused has acquired or accumulated the property or
properties in question in any case where such information
or testimony is necessary to ascertain or prove the latters
guilt or his civil liability.
All these issuances involving PCGG had legal cover, because

under Article II, Section 1 of the Freedom Constitution, the President was
able to exercise legislative power until a legislature was elected and
convened pursuant to a new Constitution. Congress convened on July 26,
1987. 37 Before that date, President Aquino had legislative powers. 38
PCGG powers and timelines
Albeit much criticized for many reasons, the PCGG has more than
served its purpose. In its Functional Transition Report, the PCGG reported
that the Arroyo Administration has recovered the amount of P65.248
Billion out of P85.640 Billion, representing more than seventy-six percent
(76%) of the total recoveries from 1987-2009. Said recoveries were made
possible by the carte blanche power given to the PCGG under Section 3 of
EO No. 1 creating the PCGG. These included remedies leading to the
forfeiture of ill-gotten wealth. Among others, the PCGG was given the
power and authority to file cases for the reconveyance, reversion,
37See Municipality of San Juan v. Court of Appeals, G.R. No. 125183, 279 SCRA
711, 717-18, Sep. 29, 1997.

38 In fact, Exec. Order No. 292 or the Administrative Code of 1987 was issued
on July 25, 1987, but it only took effect more than two years later on November 23,
1989. See also Proc. No. 495 (1989) (which changed the name of Bureau of Prisons to
Bureau of Corrections and declared Proclamation No. 495 effective as of Nov. 23,
1989).
accounting, restitution, and damages against Marcos, his relatives, and

associates.39
Apart from the PCGGs rule-making power under Section 3(h) of

EO No. 1, Chief Justice Teehankee opined that the commission exercises
quasi-judicial functions, and that it is a co-equal body with Regional Trial
Courts.40 But Justice Feliciano, while concurring with the great bulk of
the majority opinion so vigorously written, pointed out that the PCGG is
clearly not a court, albeit it can be regarded as exercising quasi-judicial
functions only in a loose and non-technical sense. Accordingly, the PCGG
in issuing a sequestration or takeover orders is not properly regarded as
determining private rights. All that the PCGG is really doing in issuing
such orders is determining whether there exists a prima facie basis for filing
the appropriate proceedings before the Sandiganbayan to seek the recovery
or reconveyance, etc., of the sequestered assets probably belonging to the
category of ill-gotten wealth. According to Justice Feliciano, the PCGG
is akin to a fiscal or public prosecutor.41 Understandably, the PCGG has no
authority to issue a search and seizure order since it is not a judge or such
other responsible officer as may be authorized by law.42
Although the PCGG has the authority to file cases with the
Sandiganbayan, including forfeiture proceedings pursuant to R.A. No.
1379, in relation to E.O. No. 1 and E.O. No. 2, pursuant to the 1987
Constitution, the authority to issue sequestration or freeze orders under
Proclamation No. 3 shall remain operative for not more than 18 months
after the ratification of the 1987 Constitution, which was on February 2,
1987. For orders issued before the ratification of this Constitution, the
corresponding judicial action or proceeding shall be filed within six (6)
months from its ratification. For those issued after such ratification, the
judicial action or proceeding shall be commenced within six (6) months
39As cited in Republic of the Philippines v. Sandiganbayan, 255 SCRA 438, 478-80,
citing Cojuangco, Jr. vs. PCGG, 190 SCRA 226, 249, the PCGG is also empowered to
(1) Conduct an investigation including the preliminary investigation and prosecution of
the ill-gotten wealth cases of former President Marcos, relatives and associates, and
graft and corruption cases assigned by the President to it; (2) Issue sequestration orders
in relation to property claimed to be ill-gotten; (3) Issue freeze orders prohibiting
persons in possession of property alleged to be ill-gotten from transferring or
otherwise disposing of the same; (4) Issue provisional takeover orders of the said
property; (5) Administer oaths and issue subpoenas in the conduct of investigation;
and (6) Hold any person in direct or indirect contempt and impose the appropriate
penalties as provided by the rules.
40 PCGG v. Judge Pea, G.R. No. 77663, 159 SCRA 556, 564, Apr. 12, 1988
(which was penned by Chief Justice Teehankee).

41 Compare with Judge Pea, 159 SCRA at 584.
42 Republic, 255 SCRA at 483-84.
from the issuance thereof.43 Hence, the issuance and service of the writ of
sequestration cannot be made beyond the eighteen-month period from the
ratification of the 1987 Constitution.44
Akin to the provisional remedies of preliminary attachment or

receivership, PCGG sequestration and freeze orders were deemed valid as
provisional measures to collect and conserve assets believed to be ill-gotten
wealth. The Supreme Court characterized these forfeiture orders as not
confiscatory, but only preservative in character. As such, they are not
designed to effect a confiscation of, but only to conserve properties
believed to be ill-gotten wealth of the ex-president, his family, and
associates, and to prevent their concealment, dissipation, or transfer,
pending the determination of their true ownership.45 Even as its power
ceased by Constitutional fiat, no tears were shed for the demise of the era
of sequestration and freeze orders. As PCGG Chair Andres Bautista
decried in a 2010 symposium, many fiscal agents of the PCGG have run
the sequestered assets to the ground. This is due in a large part to the
absence of an independent central asset management agency to maintain,
conserve, and protect the sequestered and forfeited assets.
3. Section 15, Chapter IV, Title I, Book III, E.O. No.

292 Power over Ill-Gotten Wealth
Section 15, Chapter IV, Title I, Book III, E.O. No. 292 provides:
SEC. 15. Power over Ill-gotten Wealth. The President shall

direct the Solicitor General to institute proceedings to recover
properties unlawfully acquired by public officials or employees,
from them or from their nominees or transferees.
Within the period fixed in, or any extension thereof

authorized by, the Constitution, the President shall have the
authority to recover ill-gotten properties amassed by the leaders
and supporters of the previous regime and protect the interest
of the people through orders of sequestration or freezing of
assets or accounts.
This provision deals with the authority of the Solicitor General to

institute proceedings for the forfeiture of ill-gotten wealth at the instance
of the President. However, even under Section 2 of R.A. No. 1379, it was
CONST. art XVIII, 26.

43
See PCGG vs. Sandiganbayan, G.R. No. 125788, Jun. 5, 1998 compare with
44
CONST. art XVIII, 26.

45 Baseco v. PCGG, G.R. No. 75885, 150 SCRA 181, May 27, 1987.
the Solicitor General who was authorized to initiate forfeiture proceedings

before the then Courts of First Instance. P.D. No. 1486 later vested the
Sandiganbayan with jurisdiction over R.A. No. 1379 forfeiture
proceedings. On the other hand, Sec. 12 of P.D. No. 1486 gave the Chief
Special Prosecutor the authority to file and prosecute forfeiture cases. The
Supreme Court in Garcia v. Sandiganbayan46 took this as an implied repeal by
P.D. No. 1486 of the jurisdiction of the former Courts of First Instance
and the authority of the Solicitor General to file a petition for forfeiture
under Sec. 2 of R.A. No. 1379 by transferring said jurisdiction to the
Sandiganbayan and the authority to file and prosecute to the Chief Special
Prosecutor. Curiously, there is no discussion in Garcia as to how Section
15, Chapter IV, Title I, Book III of the Administrative Code figures in the
equation, considering that E.O. No. 292 took effect on November 23,
1989, while R.A. No. 677047 took effect on December 7, 1989.
The answer to this dilemma lies in Section 15(11) of R.A. No.

6770, which provides that the Office of the Ombudsman shall investigate
and initiate the proper action for the recovery or ill-gotten and/or
unexplained wealth amassed after February 25, 1986 and the prosecution
of the parties involved therein. Harmonizing it with the provisions of the
Administrative Code, the same conclusion reached by the Supreme Court
will be reached. Thus, the OSG may still file a civil forfeiture case if the
public officer amassed the ill-gotten or unexplained wealth on or before
February 25, 1986.48 As regards the issuance of sequestration or freeze
orders under Proclamation No. 3 dated March 25, 1986 in relation to the
recovery of ill-gotten wealth, it remained operative for not more than
eighteen months after the ratification of the 1987 Constitution,49after
which no more extension was granted by the Congress.
4. R.A. No. 9160 The Anti-Money Laundering Act of

200150
R.A. No. 9160, the Anti-Money Laundering Act of 2001

(hereinafter AMLA), criminalized money laundering in the Philippines
and enumerated the unlawful activities covered by it, authorizing in the
46 See Garcia v. Sandiganbayan (hereinafter Garcia), G.R. No. 165835, 492

SCRA 600, 632, Jun. 22, 2005.
47 Rep. Act No. 6770, 15(11) (1989). This is the Ombudsman Act of 1989.
(which conferred upon the Ombudsman the power to investigate and initiate the
proper action for the recovery of ill-gotten and/or unexplained wealth amassed after
February 25, 1986 and the prosecution of the parties involved therein.
48 Garcia 492 SCRA at 637.
49 CONST. art. XVIII, 26.
50As amended by Rep. Act No. 9194 (2003).
process the filing of a civil forfeiture case over the monetary instrument or
property wholly or partially, directly or indirectly related to covered
unlawful activity51 or money laundering offense.52 While not exactly
superseding R.A. No. 1379, the AMLA added more punch to the
moribund forfeiture laws of the country.
Money laundering is defined as a crime whereby the proceeds of

an unlawful activity53 are transacted, thereby making them appear to have
originated from legitimate sources. It is committed by the following: (a)
Any person knowing that any monetary instrument or property represents,
involves, or relates to, the proceeds of any unlawful activity, transacts or
attempts to transact said monetary instrument or property; (b) Any person
knowing that any monetary instrument or property involves the proceeds
of any unlawful activity, performs or fails to perform any act as a result of
which he facilitates the offense of money laundering referred to in
paragraph (a) above; and (c) Any person knowing that any monetary
instrument or property is required under this Act to be disclosed and
reported to the Anti-Money Laundering Council (hereinafter AMLC),
fails to do so.54
Civil forfeiture proceedings proceed independently of the

prosecution for unlawful activities provided under the law.55 Moreover, a
prior charge or conviction for any predicate crime56 or money laundering
offense57 is not required. No prejudicial question can therefore arise,
considering that the civil and criminal actions can proceed independently
of each other.58
The Anti-Money Laundering Council (AMLC)
The AMLC which is composed of the Governor of the Bangko

Sentral ng Pilipinas as chairman, the Commissioner of the Insurance
51 Rep. Act No. 9160, 3(i) (2001).

52 4.
53 See Rep. Act No. 9160, 3(i) (2001); See also Revised Implementing Rules and
Regulations of Rep. Act No. 9160 (hereinafter RIRR of Rep. Act No. 9160), Rule 3.i.
54 4.
55 RULE OF PROCEDURE IN CIVIL FORFEITURE, 27-28.
56 Rep. Act No. 9160, 3(i).
57 4.
58 Samson v. Daway, G.R. No. 160054-55, 434 SCRA 612, 620, Jul. 21, 2004; See
also cases cited in JOSE VITUG, ET AL., A SUMMARY OF NOTES AND VIEWS ON THE
RULE OF PROCEDURE IN CASES OF CIVIL FORFEITURE, ASSET PRESERVATION AND
FREEZING OF MONETARY INSTRUMENT, PROPERTY, OR PROCEEDS REPRESENTING,
INVOLVING, OR RELATING TO AN UNLAWFUL ACTIVITY OR MONEY LAUNDERING
OFFENSE UNDER R.A. NO. 9160, AS AMENDED 64 (Vitug, et al., eds., 2006).
Commission and the Chairman of the Securities and Exchange

Commission as members, shall act unanimously in the discharge of the
functions vested in them by law.59
In practice, it is the AMLC Secretariat which conducts the

investigations pursuant to the Internal Rules of Procedure Governing
Investigations by the Anti-Money Laundering Council Secretariat, which
was approved by BSP Resolution No. 60-07.
The process is initiated upon submission of a covered or

suspicious transaction report to the AMLC, on the basis of which and
other evidence before it, there is reasonable ground to believe that
probable cause exists. The Republic of the Philippines through the AMLC
represented by the Office of the Solicitor General then files an ex parte
application for a freeze order with the Court of Appeals.60 During the
period of the freeze order, the AMLC files a petition for a bank inquiry
with the Regional Trial Court (hereinafter RTC).61 Lastly, the AMLC
59 7.
60 10.
61 11; RIRR of Rep. Act No. 9160, Rule 11.1. (These functions include (1)
requiring and receiving covered or suspicious transaction reports from covered

institutions; (2) issuing orders addressed to the appropriate Supervising Authority or
the covered institutions to determine the true identity of the owner of any monetary
instrument or property subject of a covered transaction or suspicious transaction
report or request for assistance from a foreign State, or believed by the Council, on the
basis of substantial evidence, to be, in whole or in part, wherever located, representing,
involving, or related to directly or indirectly, in any manner or by any means, the
proceeds of an unlawful activity; (3) instituting civil forfeiture proceedings and all other
remedial proceedings through the Office of the Solicitor General; (4) causing the filing
of complaints with the Department of Justice or the Ombudsman for the prosecution
of money laundering offenses; (5) investigating suspicious transactions and covered
transactions deemed suspicious after an investigation by AMLC, money laundering
activities and other violations of this Act; (6) applying before the Court of Appeals, ex
parte, for the freezing of any monetary instrument or property alleged to be the
proceeds of any unlawful activity as defined in Section 3(i) of R.A. No. 9160, as
amended; (7) implementing such measures as may be necessary and justified under this
Act to counteract money laundering; (8) receiving and taking action in respect of, any
request from foreign states for assistance in their own anti-money laundering
operations provided in this Act; (9) developing educational programs on the pernicious
effects of money laundering, the methods and techniques used in the money
laundering, the viable means of preventing money laundering and the effective ways of
prosecuting and punishing offenders; (10) enlisting the assistance of any branch,
department, bureau, office, agency, or instrumentality of the government, including
government-owned and -controlled corporations, in undertaking any and all anti-
money laundering operations, which may include the use of its personnel, facilities and
resources for the more resolute prevention, detection, and investigation of money
laundering offenses and prosecution of offenders; and (11) imposing administrative
institutes an action for civil forfeiture with an application for an asset

preservation order before the same trial court.62
The Republic of the Philippines, through the AMLC, represented

by the Office of the Solicitor General, files the petition for a freeze order
before the Court of Appeals.63 This petition is filed ex parte and must be
verified.64 Before the amendment of R.A. No. 9160 by R.A. No. 9194, the
AMLC was empowered to issue freeze orders. Thus, the original text of
Section 10 of R.A. No. 9160 authorized a fifteen (15)-day freeze order by
the AMLC, which could be extended upon order of the court. The
pendency of the courts decision to extend the period tolled the fifteen
(15)-day period. During that time, no court could issue a temporary
restraining order or writ of injunction against any freeze order issued by
the AMLC except the Court of Appeals or the Supreme Court.
Section 10 as amended by R.A. No. 9194 removed that power of

the AMLC and authorized the Court of Appeals upon application ex parte
by the AMLC and after the courts determination that probable cause65
exists that any monetary instrument or property is in any way related to an
unlawful activity as defined in Section 3(i) of R.A. No. 9160, as amended
to issue within twenty-four hours of the filing of the petition,66 a freeze
sanctions for the violation of laws, rules, regulations, and orders and resolutions issued
pursuant thereto.)
62 12 (a).
63 Republic v. Cabrini Green & Ross, Inc., G.R. No. 155554, 489 SCRA 645, May
5, 2006. See also Supreme Court Admin. Matter No. 5-11-04-SC, 44 (2005). This is the
Rule of Procedure in cases of civil forfeiture, asset preservation, and freezing of
monetary instrument, or property, or proceeds representing, involving, or relating to an
unlawful activity or money laundering offense under Rep. Act No. 9160, as amended
(hereinafter RULES OF PROCEDURE IN CASES OF CIVIL FORFEITURE). (However,
Justice Vitug refrains from calling an application for a freeze order a provisional
remedy. The Rule also provides that after the post-issuance hearing, the case is
remanded to the RTC and the records consolidated with that of the civil forfeiture
case. The Court of Appeals case does not result in the forfeiture of the frozen
monetary instrument, property, or proceeds). See also Republic v. Eugenio, Jr., G.R.
No. 174629, 545 SCRA 384, 403, Feb. 14, 2008 (wherein Justice Tinga, writing for the
majority of the court, categorized the freeze and bank inquiry orders as provisional
remedies.).
64 Rep. Act No. 9160, 10 (2001); RULES OF PROCEDURE IN CASES OF CIVIL
FORFEITURE, 44-45.
65 Rule 10.2. Probable cause includes such facts and circumstances which would
lead reasonably discreet, prudent or cautious man to believe that an unlawful activity
and/or a money laundering offense is about to be, is being or has been committed and
that the account or any monetary instrument or property subject thereof sought to be
frozen is in any way related to said unlawful activity and/or money laundering
offense. RIRR of Rep. Act No. 9160.
66 RULES OF PROCEDURE IN CASES OF CIVIL FORFEITURE, 51.
order which shall be effective immediately. The freeze order lasts for
twenty (20) days unless extended by the court.
Upon motion of the AMLC filed before the expiration of the

twenty-day period, during which time the respondent is given a chance to
oppose,67 the Court of Appeals may for good cause extend its effectivity
for a period not exceeding six (6) months.68 Here, the onus is on the
respondent to show that the Republic is not entitled to the extension of the
freeze order.
The freeze order covers any monetary instrument, property, or

proceeds relating to or involving an unlawful activity as defined under
Section 3(i) of Republic Act No. 9160, as amended by Republic Act No.
9194,69 as well as related web of accounts,70 whereby upon receipt of the
freeze order, the respondent, covered institution, or government agency is
mandated to immediately desist from and not allow any transaction,
withdrawal, deposit, transfer, removal, conversion, other movement or
concealment of the account representing, involving or relating to the
subject monetary instrument, property, proceeds, or its related web of
accounts.71 Since a freeze order is only provisional in nature, the Court of
Appeals will remand the case and transmit the records to the RTC for
consolidation with the civil forfeiture case pending before the latter.72
However, a party aggrieved by the decision of the Court of Appeals may
elevate it to the Supreme Court by way of a petition for review on
certiorari under Rule 45 of the Rules of Court but the appeal shall not stay
the enforcement of the decision unless the Supreme Court directs
otherwise.73
During the pendency of the freeze order, the AMLC usually files
before the RTC a petition for bank inquiry, with notice to the respondent,
to look into or examine any of his particular deposits or investments with
67 53.
68 RIRR of Rep. Act No. 9160, Rule 10.5a (2003). See also Republic v. Cabrini
Green & Ross, Inc., 489 SCRA at 649.
70 RIRR of Rep. Act No. 9160, Rule 10.4, par. 2 (2003); Related web of accounts
pertaining to the money instrument or property subject of the freeze order is defined
under Rule 10.4, par. 1. of the Implementing Rules as those accounts, the funds and
sources of which originated from and/or are materially linked to the monetary
instrument(s) or property(ies) subject of the freeze order(s).
72 53(a), 56.
73 57.
any banking institution or non-bank financial institution.74 If there is

probable cause that the deposits or investments are related to an unlawful
activity as defined in Section 3(i) of R.A. No. 9160, as amended, or a
money laundering offense under Section 4 of the law, the RTC shall grant
the petition. However, the AMLC may inquire into bank accounts without
having to obtain a judicial order in cases where there is probable cause that
the deposits or investments are related to kidnapping for ransom, certain
violations of the Comprehensive Dangerous Drugs Act of 2002, hijacking
and other violations under R.A. No. 6235, destructive arson, and murder.75
After the bank inquiry, the AMLC may thereafter file a petition for
civil forfeiture. The action is filed before any RTC of the judicial region
where the monetary instrument, property, or proceeds representing,
involving, or relating to an unlawful activity or a money laundering offense
are located. Where all or any portion of the monetary instrument, property,
or proceeds is located outside the Philippines, the petition may be filed at
the RTC in Manila, or at the RTC of the judicial region where any portion
of the monetary instrument, property, or proceeds is located, at the option
of the petitioner.76 The executive judge of the RTC or, in his absence, the
vice-executive judge or, in their absence, any judge of the RTC of the same
station shall act on the petition within twenty-four hours after its filing.77
Unlike in ordinary civil actions, the respondent in a civil forfeiture

case is notified of the petition through a notice, instead of a summons.
However, the contents of the notice are substantially the same as that of a
summons, with the exception that, instead of ordering the defendant
should answer within the time fixed by the Rules of Court,78 the notice
contains a proviso that, if no comment or opposition is filed within the
reglementary period, the court shall hear the case ex parte and render such
judgment as may be warranted by the facts alleged in the petition and its
supporting evidence.79 In certain cases, it may be necessary to effect service
of summons by publication where the respondent is designated as an
unknown owner, or his whereabouts are unknown and cannot be
ascertained by diligent inquiry. In that case, service may, by leave of court,
be effected upon him by publication of the notice of the petition in a
74 Rep. Act No.9160, 11 (2001) (which refers to a competent court, i.e., the RTC
which is a court where actions incapable of pecuniary estimation are filed.).

75 Republic v. Eugenio, Jr., G.R. No. 174629, 545 SCRA 384, 405, Feb. 14, 2008;
RIRR of Rep. Act No. 9160, Rule 11.1.

77 5.
78 RULES OF COURT, Rule 14, 2.
newspaper of general circulation in such places and for such time as the
RTC may order.80
In observance of the due process requirement,81 the respondent is

given the opportunity to file a verified comment or opposition, not a
motion to dismiss the petition, within fifteen days from service of notice or
within thirty days from publication in case service of notice was by
publication.82 In the event of the failure of the respondent to file the
Comment or Opposition, the court shall hear the case ex parte and render
such judgment as may be warranted by the facts alleged in the petition and
its supporting evidence.83
Pre-trial is also mandatory in civil forfeiture proceedings. If a

comment on, or an opposition to the civil forfeiture petition is filed, the
court, without any need of motion, shall forthwith send notice of pre-trial
conference to the parties.84 The pre-trial proceeds in the same way as in
ordinary civil actions.85 But the RTC is not allowed to consider suspending
the proceedings or tackling the possibility of amicable settlement,
mediation, and other alternative modes of dispute resolution,86 unlike in
regular proceedings before said court. However, just like in an ordinary
civil action, failure on the part of the petitioner to appear during the pre-
trial will cause the dismissal with prejudice of the petition, unless otherwise
ordered by the court.87 Failure on the part of respondent to appear during
the pre-trial has the same effect as failure to file his comment or opposition
to the petition and the court will allow the petitioner to present its evidence
ex parte and render judgment on the basis thereof,88 as if respondent failed
to file his verified comment on, or opposition to, the civil forfeiture
petition.89
Even before the pre-trial, i.e., within twenty-four hours from the
filing of the civil forfeiture petition, the RTC may issue ex parte a
provisional asset preservation order (PAPO), enforceable anywhere in the
80 8(b).
81See CONST. art. III, 1 (which provides that No person shall be deprived of
life, liberty, or property without due process of law.).
83 10.
84 22.
85 22(b); Compare with RULES OF COURT, Rule 18.
86 This is because amicable settlement, mediation, or any other alternative mode of
dispute resoluition is not allowed. See RULES OF PROCEDURE IN CASES OF CIVIL

FORFEITURE, 26.
87 24.
88 Id.
89 10.
Philippines, when probable cause exists that the monetary instrument,

property, or proceeds subject of the petition are in any way related to an
unlawful activity as defined in Section 3(i) of R.A. No. 9160, as amended
by R.A. No. 9194. It is effective immediately, and shall be valid for twenty-
days.90 Within this period, the court shall determine whether the PAPO
should be modified or lifted, or an asset preservation order (APO) should
be issues.91 This means that even without the petitioner filing a motion for
extension of the freeze order, the court must conduct a summary hearing
to ascertain fate of the PAPO. Basically, a PAPO or APO forbids any
transaction, withdrawal, deposit, transfer, removal, conversion,
concealment, or other disposition of the subject monetary instrument,
property, or proceeds. A PAPO or APO may be lifted if it was improperly
or irregularly issued or enforced; any of the material allegations in the
petition, or any of the contents of any attachment to the petition thereto,
or its verification, is false; and the specific personal or real property
ordered preserved is not in any manner connected with the alleged
unlawful activity as defined in Section 3(i) of Republic Act No. 9160, as
amended.92
The trial in a civil forfeiture case proceeds in accordance with Rule

30 of the Rules of Court.93 In case of an adverse judgment, the respondent
may appeal to the Court of Appeals within fifteen (15) days from notice of
the decision,94 whereby the parties are required to file their respective
memoranda instead of briefs within a non-extendible thirty-day period.95
After judgment by the civil forfeiture court, if a person who has not been
impleaded and has not intervened claims an interest in the forfeited
property, he can file a verified petition for a declaration that the same
legitimately belongs to him and for segregation or exclusion of the
monetary instrument or property corresponding thereto.96 The verified
petition shall be filed with the court which rendered the order of forfeiture
within fifteen (15) days from the date of finality of the order of forfeiture,
in default of which the order shall be executory and bar all other claims.97
This reveals the in rem nature of civil forfeiture proceedings: they are
binding against the whole world. After fifteen (15) days from the finality of
the forfeiture order, no more claims shall be entertained concerning
monetary instrument or property. However, if the claim is filed within the
90 11, 14.
91 12.
92 17.
93 29.
94 34(a).
95 34(b).
96 35.
97 35.
reglementary period, the petitioner shall be required to comment on the

claim; otherwise, the court may dismiss the claim outright if it is not
sufficient in form and substance and is manifestly filed for delay.98 A
decision granting or denying the claim may be appealed in the same
manner as a judgment in the civil forfeiture case.99 In both instances, the
Rule of Procedure does not provide for an appeal to the Supreme Court
from the judgment of the Court of Appeals. Nevertheless, the Rules of
Court providing for an appeal from the Court of Appeals to the Supreme
Court by way of Rule 45 applies suppletorily, in the same manner that the
grant or denial of the application for a freeze order by the Court of
Appeals may be appealed to the Supreme Court by way of a petition for
review on certiorari.100
IV. Loopholes in the law
The Case of Major General Carlos Garcia
The criminal cases before the Sandiganbayan Second Division

against Major General Carlos F. Garcia and his family for plunder101 and
violation of the Anti-Money Laundering Law102 highlighted a problem in
the AMLA. In the plunder case, General Garcia and his co-accused were
alleged to have accumulated a total amount of P303,272,005.99 in ill-gotten
wealth.
After the prosecution ended presenting evidence in the bail

hearings in the plunder case to prove that the evidence of guilt against
General Garcia is strong, the Sandiganbayan Second Division issued a
Resolution on January 7, 2010 which denied General Garcias application
for bail and declared that the conglomeration of evidence presented by
the prosecution is viewed by the Court to be of strong character that
militates against the grant of bail. In an undated Plea Bargaining
Agreement, however, General Garcia and the Office of the Special
Prosecutor of the Office of the Ombudsman consented to General
Garcias change of plea to indirect bribery under Article 211, par. 1 of the
RPC and facilitation of money laundering under Section 4(b) of R.A. No. 9160,
as amended. Acting Deputy Special Prosecutor Wendell E. Barreras-Sulit
signed off on the Plea Bargaining Agreement and recommended its
approval in behalf of the Republic of the Philippines, together with Special
98 37.
99 42.
100 57.
101 Sandiganbayan Case No. No. 28107.
102 Sandiganbayan Case No. SB-09-CRM-0194.
Prosecutors Kallos, Micael, Balmeo, Jr., and Capistrano. The Plea

Bargaining Agreement was approved by then Tanodbayan Merceditas
Gutierrez with the barcode indicating the date of February 25, 2010. It
invoked the ruling in People v. Kayanan103 where it was held that the rules
allow such a plea only when the prosecution does not have sufficient
evidence to establish the guilt of the crime (sic) charged.
On May 4, 2010, the Sandiganbayan approved the plea bargain

agreement, as indicated in the fallo of the Resolution of said date, and
directed General Garcia to execute immediately the appropriate deeds of
conveyance in order to transfer, convey, cede, surrender, and relinquish to
the Republic of the Philippines his ownership and any all interests which
he may personally have over the real properties in his own name, and in
the names of spouse Clarita Depakakibo Garcia, children Ian Carl D.
Garcia, Juan Paul D. Garcia, and Timothy Mark D. Garcia, as well as all
the personal properties itemized and identified in the inventory of
properties in the Plea Bargaining Agreement belonging to him, his spouse,
and three children .104 The real and personal properties which General
Garcia agreed to transfer to the Republic of the Philippines amounted to a
total value of P135,433,387.84.105
The Sandiganbayan gave the green light to the Plea Bargaining

Agreement between General Garcia and the Office of the Ombudsman in
the criminal cases before it subject to the actual cession or transfer of
ownership in favor of the Republic of the Philippines of the subject
properties.106 This appears to be a universal agreement, inasmuch as the
restitution covered the properties which are the subject of the cases for
103 83 SCRA 437, 450(1978)

104As an interesting sidelight, Gen. Garcia filed an Urgent Motion to Post Bail
dated December 16, 2010. Someone from the OSP inscribed the note no objection
also dated December 16, 2010 on the Urgent Motion. With alacrity, the Sandiganbayan
granted the Urgent Motion to Post Bail on the same date, although it allowed Gen.
Garcia to plead guilty to the lesser offenses of indirect bribery under Article 211(1) of
the Revised Penal Code and facilitation of money laundering under Section 4(b) of
Rep. Act No. 9160, as amended. The furor over this plea bargaining agreement
prompted a congressional investigation over the matter. Although the Sandiganbayan
rebuked the Office of the Solicitor General (OSG) for filing the motion to annul the
plea bargaining agreement, the OSG later on filed a motion for the reconsideration of
the denial of its motion. Meanwhile, former Defense Secretary Angelo Reyes, who was
supposed to be a mere witness in the congressional investigations, committed suicide
after being subjected to intense grilling by some senators.
105 Undated Plea Bargaining Agreement in Crim. Case Nos. 28107 & SB-09-CR-
0194 at 5.
106 Resolution dated May 4, 2010 in Crim. Case Nos. 28107 & SB-09-CR-0194 at
10.
plunder and for violation of the Anti-Money Laundering Act.107 What this
underscores, unfortunately, is a weakness which is also considered a
strength of the AMLA as it is now worded. Because the civil forfeiture case
proceeds independently of the criminal case, a criminal court having
jurisdiction over the criminal cases can unwittingly throw a monkey wrench
on the civil forfeiture proceedings by approving a plea bargain agreement
covering the proceeds of the unlawful activity but involving only a portion
of the properties subject of the civil forfeiture proceedings. Or the criminal
court may acquit the accused who is also subject of civil forfeiture
proceedings, and declare that said accused has no ill-gotten properties.
Both of these scenarios can result in the dismissal of the civil forfeiture
case against the accused. This can frequently happen because criminal
court may be unaware of what is happening in the civil forfeiture court,
unless the latter court gives leave for information to be released to the
criminal court. At the same time, the OSG handles the civil forfeiture cases
while the prosecutor handles the criminal cases. There may not be a room
for information sharing in view of the confidentiality provisions in the
AMLA and its Rule of Procedure.
What is needed, therefore, is an amendment in the AMLA making

it mandatory for the civil forfeiture court to continue with its proceedings,
notwithstanding the acquittal of the accused based on reasonable doubt, or
any plea bargaining agreement involving the forfeiture of some of the
properties of the accused. Otherwise stated, the civil forfeiture court
should grant the relief of forfeiture if the Republic is able to discharge the
onus probandi, that is, by adducing a preponderance of evidence, regardless
of whether the same properties are subject to forfeiture in the criminal
case. This is only being consistent with Section 6 of R.A. No. 9160, which
provides that (a)ny proceeding relating to the unlawful activity shall be
given precedence over the prosecution of any offense or violation under
this Act without prejudice to the freezing and other remedies provided.
It is also necessary to broaden the scope of the AMLA. There are

felonies which ought to be included among the unlawful activities
enumerated in the law.108 For one, carnapping is not included among them.
Although the Republic may argue that it is essentially the robbery or theft
Id.
107
It has been reported that the Philippine Congress will pass amendments to the
108
AMLA this year, including the addition of more predicate crimes such as trafficking in
persons, bribery, counterfeiting, fraud and other illegal exactions, malversation, forgery,
environmental crimes, and terrorism and its financing. See Butch Fernandez, Senators
vow action on AMLA Amendments, Mar. 20, 2012 available at
http://businessmirror.com.ph/home/top-news/24830-senators-vow-action-on-amla-
amendments- (date last visited: Apr. 4, 2012).
of a motorized vehicle,109 the concept of unlawful taking in theft, robbery

and carnapping being the same,110 a defendant in a civil forfeiture case
involving carnapped vehicles may contend that the offense of carnapping
not being mentioned as an unlawful activity in the AMLA should be
excluded, following the expressio unius est exclusio alterius principle.111 For
another, it may also be necessary to include the offense of failure to file a
true statement of assets and liabilities by a public officer under Section 7 of
R.A. No. 3019, in relation to Section 9(b) of the same law. If the public
official cannot explain the discrepancies concerning his lawful income
compared with his assets and liabilities, then the unreported wealth may be
declared forfeited in favor of the State, as if the property were subject to
the forfeiture provision in R.A. No. 1379. There are other white collar
crimes which should be included among the predicate offenses, like
violation of the Anti-Dummy Law and the Labor Code.
The AMLC should also be allowed by law to conduct an ex parte

bank inquiry for all types of unlawful activities, without need of securing
court approval. At present, an ex parte examination is only allowed in cases
where there is probable cause that the deposits or investments are related
to kidnapping for ransom, certain violations of the Comprehensive
Dangerous Drugs Act of 2002, hijacking and other violations under R.A.
No. 6235, destructive arson, and murder, as stated above. If the initial
freeze order or the provisional asset preservation order can be issued ex
parte, there is no logical reason why a bank inquiry, which is less restrictive
to the account holder, may not be allowed even without a court order. In
the event that Section 11 of the AMLA is further amended to authorize ex
parte bank inquiries for all types of unlawful activities, then the AMLC can
examine first the bank accounts of the respondent and strengthen its case,
before filing an application for a freeze order with the Court of Appeals.
Congress may also deem it fit to allow an automatic ex parte bank

inquiry by the AMLC on the accounts of all public officials and employees
as well as those aspiring to elective and appointive public office, even in
the absence of probable cause that they committed an unlawful activity, in
view of the constitutional principle that public office is a public trust.112
The data bank gathered from such examination will eschew later charges of
public officials skimming off public funds or enriching themselves while in
People v. Lobitania, G.R. No. 142380, 388 SCRA 417, 432, Sep. 4, 2002.
109
People v. Fernandez, G.R. No. 132788, 414 SCRA 84, 99, Oct. 23, 2003;
110
People v. Sia, G.R. No. 137457, 370 SCRA 123, 134, Nov. 21, 2001; People v. Santos,
G.R. No. 127500, 333 SCRA 319, 334, Jun. 8, 2000; People v. Bustinera, G.R. No.
148233, 431 SCRA 284, 292, Jun. 8, 2004.
111 The expression of one thing is the exclusion of another.
112 CONST. art. XI, 1.
public office. It may also discourage civil servants from committing such
effrontery in the first place. In this regard, all that is needed is political will
and a sincere desire on the part of the legislators to effect positive changes
on the political and economic landscape of the country.
Although right to privacy considerations prompted the Supreme

Court in Republic v. Eugenio, Jr.,113 to declare that Section 11 of R.A. No.
9160 does not specifically authorize ex parte bank inquiry order as a general
rule, Eugenio, Jr. acknowledged the ruling in US vs. Miller114 that there was
no legitimate expectation of privacy as to the bank records of a
depositor.115 Unperturbed, the Supreme Court invoked Section 2 of R.A.
No. 1405, the Bank Secrecy Act of 1955, which provides:
SECTION 2. All deposits of whatever nature with

banks or banking institutions in the Philippines including
investments in bonds issued by the Government of the
Philippines, its political subdivisions and its instrumentalities,
are hereby considered as of an absolutely confidential nature
and may not be examined, inquired or looked into by any
person, government official, bureau or office, except upon
written permission of the depositor, or in cases of
impeachment, or upon order of a competent court in cases of
bribery or dereliction of duty of public officials, or in cases
where the money deposited or invested is the subject matter of
the litigation.116
In any event, Section 11 of the AMLA specifically authorizes the

Bangko Sentral ng Pilipinas to inquire into or examine any deposit or
investment with any banking institution or non-bank financial institution
when the examination is made in the course of a periodic or special
examination, in accordance with the rules of examination of the BSP.
There is no reason why the same power cannot be granted to the AMLC
by Congress, even without need of a court order.
The Pros and Cons of Civil Forfeiture
The AMLA has proven to be an effective tool at forfeiting ill-

gotten wealth, much more successful than the original forfeiture law, R.A.
113 545 SCRA at 412-15.

114 425 US 435(1976).
115 Eugenio, Jr , 545 SCRA at 413.
116 Id. at 414.
No. 1379. This is probably because R.A. No. 1379 required that a taxpayer
should file the complaint first before a fiscal against a public official or
employee who acquired property manifestly out of proportion to his lawful
income,117 although this small detail did not prevent the PCGG from
applying the old forfeiture law in filing through the OSG civil forfeiture
cases against former President Marcos, his relatives, and associates
pursuant to E.O. No. 14-A. Upon other hand, the government itself
initiates the complaint under R.A. No. 9160, as amended. In retrospect, the
legislative proscription in the AMLA was necessary, especially with the
inclusion of the Philippines in the Financial Action Task Forces list of
non-cooperative countries and territories in the fight against money
laundering.118 The AMLA does not only go after government officials and
employees who pillage the public treasury, it also targets monetary
instruments, property, or proceeds amassed by private individuals which
represent, relate to, or involve unlawful activities mentioned in the law, as
well as money laundering activities punished therein.
One advantage of a civil forfeiture proceeding is that it requires

merely a preponderance of evidence.119 The evidence should be of greater
weight or more convincing than that adduced by the other side.120
Another is that the AMLA adopted the reverse burden rule. Once
the AMLC established probable cause, the burden of evidence shifted to
the owner or possessor to prove that the monetary instrument, property,
or proceeds do not represent, relate to, or involve any money laundering
activity or unlawful activity. Hence, the twenty-day provisional asset
preservation order (PAPO) is issued once the court has determined within
twenty-four hours of the filing of the petition for civil forfeiture,121 that
probable cause exists on the basis of the allegations of the verified petition
which is sufficient in form and substance, that the monetary instrument,
property, or proceeds subject of the petition represent, relate to, or involve
any money laundering activity or unlawful activity.122 During the twenty-
day period, the respondent must show cause why the provisional asset
preservation order should be modified or lifted.123 In the same manner, the
application for a freeze order before the Court of Appeals should allege the
Rep. Act No. 1379, 2 (1955).

117
118Eugenio, Jr., 545 SCRA at 402, citing J.M.B. TIROL, THE ANTI-MONEY
LAUNDERING LAW OF THE PHILIPPINES ANNOTATED 3 (2nd ed. 2007).
119 RULE OF PROCEDURE ON CIVIL FORFEITURE, 32.
120 Duarte v. Duran, G.R. No. 173038, Sep. 14, 2011; Republic v. De Guzman,
G.R. No. 175021, Jun. 15, 2011; Tamani v. Salvador, 647 SCRA 132, 151 (2011);
Metropolitan Bank and Trust Co. v. Custodio, 645 SCRA 697, 712 (2011).
121 RULE OF PROCEDURE ON CIVIL FORFEITURE, 5.
122 11.
123 12.
ground relied upon and the supporting evidence showing that the subject
monetary instrument, property, or proceeds are in any way related to or
involved in an unlawful activity as defined in the AMLA.124 Upon a
showing of probable cause, a twenty-day freeze order is issued within
twenty-four hours from the filing of the application.125 Within the twenty-
day period, a post-issuance hearing is held where respondent is burdened
to show by preponderance of evidence that petitioner is not entitled to an
extension of the freeze order.126
Civil forfeiture proceedings here are kept on a loose leash, unlike

in the United States, which in 2000 enacted the Civil Asset Forfeiture
Reform Act (hereinafter CAFRA) after the defense bar made its voice
heard in the political arena. CAFRA did away with the reverse burden
provision, increasing the difficulty for obtaining forfeitures under US law.
The liability imposed by CAFRA on the US government for an owners
attorneys fees if the owner won the release of property in a civil forfeiture
case also had a dampening effect on the institution of forfeiture cases.127
It does not require the indictment of the respondent, or the

pendency of a criminal case against him, or his conviction, before the asset
is forfeited. However, the verified petition for civil forfeiture must allege
the acts or omissions prohibited by, and the specific provisions of the
AMLA, which are the grounds relied upon for the forfeiture of the
monetary instrument, property, or proceeds.128
Prescription, laches, or estoppel also do not lie with regard to the

right of the State to recover the ill-gotten wealth of public officials or
employees.129
Other than those mentioned above, there are provisional remedies

in civil forfeiture proceedings under the AMLA, i.e., freeze, asset
preservation, and bank inquiry orders are available to prevent a dissipation
of the asset sought to be forfeited.130
Upon the other hand, in criminal forfeiture, forfeiture or

confiscation of the instruments and proceeds of the offense is part of the
124 46.
125 51, 53.
126 53.
127 Weld, supra note 12, at 2.
128 4.
129 CONST. art. XI, 15.
130 Rep. Act No. 9160, 10-11; RULE OF PROCEDURE ON CIVIL FORFEITURE,
11-12, 44, 52-53, 55; See also Eugenio, Jr., 545 SCRA at 403.
criminal proceedings, saving an enormous amount of prosecutorial and

judicial resources.131 However, in case of acquittal, the proceeds of the
alleged crime would not be forfeited, because the accessory penalty cannot
be imposed.132
Prescinding, civil forfeiture proceedings are not a silver bullet for

every offense in the statute books. Only those listed as unlawful activities
in the AMLA may be subject to forfeiture proceedings under that law.
Forfeitures may also be meted out in administrative proceedings. For
example, the Department of Environment and Natural Resources Secretary
and his duly-authorized representatives are given the authority to
confiscate and forfeit forest products illegally cut, gathered, removed, or
possessed or abandoned, and all conveyances used either by land, water, or
air in the commission of the offense, and to dispose of the same.133 This
administrative remedy is totally separate and distinct from criminal
proceedings.134 The Collector of Customs is likewise authorized to institute
forfeiture proceedings and lawfully assume jurisdiction to forfeit in favor
of the government, smuggled goods,135 and the trial court cannot replevin
property which is subject of seizure and forfeiture proceedings for
violation of the Tariff and Customs Code,136 because the Collector of
Customs has exclusive jurisdiction over said proceedings.137
A parting shot
The long and short of it is that civil forfeiture proceedings under

the AMLA should be the preferred mode in recovering monetary
instruments, property, or proceeds relating to, representing, or involving an
unlawful activity or a money laundering offense, because they are summary
in nature and offer provisional remedies that immediately preserve those
properties for the duration of the litigation, a feature which is not available
in criminal proceedings. While provisional remedies are also available in
criminal actions insofar as they are applicable, they are not issued with the
131 REV. PEN. CODE, art. 25.

132 REV. PEN. CODE, arts. 25, 46.
133 Pres. Dec. No. 705, 68 (1975), cited in Paat v. Court of Appeals, G.R. No.
111107, 266 SCRA 167, 180, Jan. 10, 1997.

134 Paat, 266 SCRA 167.
135 Vierneza v. Commissioner of Customs, G.R. No. 24348, 24 SCRA 394, 399,
Jul. 30, 1968.

136 See Pacis v. Averia, G.R. No. 22526, 18 SCRA 907, 917, Nov. 20, 1966.
137 Zuo v. Cabredo, A.M. No. RTJ-03-1779, 402 SCRA 75, 82, Apr. 30, 2003.
same efficiency and dispatch 138 unlike in civil forfeiture proceedings

pursuant to R.A. No. 9160, as amended.
Having said that, what the country presently needs is a central

asset management authority which will maintain, preserve, and protect
seized and forfeited monetary instruments, property, or proceeds. As
proposed by American authorities, the authority will work hand and in
hand with the courts in conserving assets in custodia legis, and managing
assets already forfeited to the State. The creation of a central asset
management authority will help prevent recovered assets from being
purloined or spirited away by miscreants.
The road to a graft and crime-free Philippines is long and arduous.

But the government must begin from somewhere. Consequently, the
congressional initiative to amend the Anti-Money Laundering Act of 2001,
as well other laws including the Revised Penal Code, is a step towards the
promised land.
- o0o -
138 RULES OF COURT, Rule 127, 1. For example, when the civil action is properly
instituted in the criminal action, Rule 127, 2 provides that the offended party may
have the property of the accused attached as security for the satisfaction of any
judgment that may be recovered from the accused in the following cases: (a) when the
accused is about to abscond from the Philippines; (b) when the criminal action is based
on a claim for money or property embezzled or fraudulently misapplied or converted
to the use of the accused who is a public officer, officer of a corporation, attorney,
factor, broker, agent or clerk, in the course of his employment as such, or by any other
person in a fiduciary capacity, or for a willful violation of duty; (c) when the accused
has concealed, removed, or disposed of his property, or is about to do so; and (d)
when the accused resides outside the Philippines.

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CIVIL FORFEITURE PROCEEDINGS IN THE

PHILIPPINES: THE LONG ROAD AHEAD*

In the heat of the verbal tussles between the contending lawyers in

The limited jurisdiction vested in the Senate by the Constitution

also be forfeited in criminal cases, as an accessory penalty, once the

While intense public scrutiny is focused on government officials,

This paper intends to discuss the advantages of instituting civil

To do this, it is necessary to go through the gamut of the

II. Historical Origins

Forfeiture is defined to be the incurring of a liability to pay a

4 REV. PEN. CODE, art. 25.

some statute or refusal to comply with some requirement of law. It may be

The penalty originated from the English principle of deodand, i.e., a

Civil forfeiture, known in the US as non-conviction based

6 BLACKS LAW DICTIONARY 778. (4th ed.)

Va 415, 32 SE 283 (1898).

http://www.unafei.or.jp/english/pdf/RS_No83/No83_06VE_Weld1.pdf (Date last

rem and therefore civil in nature. This seemingly irreconcilable

III. Laws Applicable

1. R.A. No. 1379

How presumption of ill-gotten wealth arises

A public officers or employees ostentatious display of wealth is

16 G.R. No. 152154, 416 SCRA 133, Nov. 18, 2003.

or employee shown to have amassed unexplained wealth during his

One barometer that a public officer or employee may have amassed

Section 8 above, speaks of unlawful acquisition of

Note, however, that legitimately-acquired property21 is beyond the

v. CA, 607 SCRA 394, 412 (2009)).

forfeiture.22 Instead of a trial, the law merely requires a hearing, during

Although the evidence asked of a person may tend to incriminate

22 Rep. Act No. 1379, 2 (1955).

to the forfeiture of alleged ill-gotten wealth of former President Marcos,

The travails of a respondent facing civil forfeiture proceedings

In this instance, a dilemma arises: can the forfeiture court impose

31 Exec. Order No. 14, 6 (1986).

What about the indefinite suspension of respondent until the

After the ouster of the late President Ferdinand Marcos, President

3. E.O. No. 14 dated May 7, 1986, which empowered the

4. E.O. No. 14-A dated August 18, 1986 which provided

35Rep. Act No. 6770, 24 (1989).

under R.A. No. 1379, or for restitution, reparation of

All these issuances involving PCGG had legal cover, because

PCGG powers and timelines

711, 717-18, Sep. 29, 1997.

accounting, restitution, and damages against Marcos, his relatives, and

Apart from the PCGGs rule-making power under Section 3(h) of

(which was penned by Chief Justice Teehankee).

Akin to the provisional remedies of preliminary attachment or

3. Section 15, Chapter IV, Title I, Book III, E.O. No.

SEC. 15. Power over Ill-gotten Wealth. The President shall

Within the period fixed in, or any extension thereof

This provision deals with the authority of the Solicitor General to

CONST. art XVIII, 26.

CONST. art XVIII, 26.

the Solicitor General who was authorized to initiate forfeiture proceedings

The answer to this dilemma lies in Section 15(11) of R.A. No.

4. R.A. No. 9160 The Anti-Money Laundering Act of

R.A. No. 9160, the Anti-Money Laundering Act of 2001

46 See Garcia v. Sandiganbayan (hereinafter Garcia), G.R. No. 165835, 492

Money laundering is defined as a crime whereby the proceeds of

Civil forfeiture proceedings proceed independently of the

The Anti-Money Laundering Council (AMLC)

The AMLC which is composed of the Governor of the Bangko